PUBLIC sector workers earn up to 25 per cent more than their counterparts in private firms in many parts of the country, a report revealed yesterday.

Scrapping national pay deals with public sector unions could save taxpayers £6.3billion a year []

Scrapping national pay deals with public sector unions could save taxpayers £6.3billion a year, it said. The growing pay and pensions gap was identified by Policy Exchange, a Westminster-based think-tank with close links to Downing Street.

The evidence is expected to fuel the growing coalition row about whether national public sector pay rates should be stopped. Report co-author Matthew Oakley said: “The current system of national pay bargaining is bad for the economy and bad for public services.”

Unison general secretary Dave Prentis said: “Attacking public sector pay, under the banner of fairness, is a misguided short-term fix to a much bigger problem – our stalled and floundering economy.”